Yucaipa makes unsolicited bid for Morgans

Yucaipa makes unsolicited bid for Morgans

Citing concern about the company?s strategic direction, major shareholder Yucaipa Cos. on Friday made an unsolicited offer to buy Morgans Hotel Group, New York City, for US$8 per share or roughly US$265 million, according to a filing with the U.S. Securities and Exchange Commission.

Morgans confirmed it received a letter from Yucaipa containing a conditional acquisition offer, adding it would “carefully review the proposal with its financial and legal advisors and will determine the appropriate response in due course.” It also advised shareholders not take immediate action in response to Yucaipa’s offer.

In June, shareholder Kerrisdale Capital Management suggested Morgans sell to enhance its value, a move that move came just after dissident shareholder OTK Associates gained control of Morgans board, making it more difficult to sell the company.

OTK’s victory marked the end of a months-long battle for control of Morgans that pitted OTK against Morgans’ management and Yucaipa.

On Friday, Burkle said in his letter that his firm agrees with Kerrisdale Capital that it is in the best interest of shareholders to sell the company immediately.